Senomyx Q1 Loss Widens; Company Backs Outlook Amid Firmenich Pact

Posted: April 25, 2013

Senomyx Inc.'s first-quarter loss widened and its revenue fell from a year ago, although the company backed its 2013 outlook due to an extended collaboration with Firmenich.

"The extended collaboration was generally contemplated in our original 2013 guidance and we are therefore confirming our guidance,” said Tony Rogers, Senomyx's svp and financial chief.

For the full year 2013, Senomyx continues to expect total revenue of $31 million to $34 million, operating expenses of $41 million to $43 million, of which about $4 million is non-cash, stock-based compensation expense; and a net loss of $8 million to $10 million. Year-end cash, cash equivalents and investments available for sale balance is slated at greater than $30 million.

In April, Senomyx inked a research collaboration with Firmenich in which the companies amended and restated their sweet taste program collaboration agreement to extend the period of research funding from Firmenich for the program through July 2016 and separately signed a 10-year supply agreement. During the release of its first-quarter results, Senomyx said the deal will provide non-dilutive additional funding commitments while bolstering its commercial revenue opportunity through a higher royalty rate and access to additional product categories for the company's newly implemented direct sales strategy.

Under the terms of the extended collaboration, Senomyx will receive $4 million in additional license payments in 2013 and another $1 million at some point in the future, but not later than July 2016. It also expects to recognize revenue on this $5 million ratably over the period April 2013 to July 2016. Senomyx also secured $13 million in additional research funding, of which it will recognize $1.7 million of this amount in 2013 and the remaining portion will be recognized as revenue between 2014 and July 2016.

Speaking with analysts and investors during the earnings conference call, company executives added that if all milestones are achieved, Senomyx will receive up to $70 million due to the Firmenich pact.

For the first quarter, Senomyx's loss widened to $3 million from $1.85 million a year earlier. Revenue for the three months fell to $7.48 million from $8.28 million a year ago.